Little Surprise in Disappointing U.K. Retail Sales

By

Ilona Billington

Jan 18, 2013 12:34 pm GMT

Official figures from the Office for National Statistics Friday underscored poor trading results from various U.K. stores.

Coming at the end of a week that has seen Blockbusters and HMV call in the administrators, news that total retail sales were 0.1% weaker in December than November and were only 0.3% stronger than a year ago—the weakest annual performance in two years—wasn’t a huge surprise.

But, what might be of interest is that online retail sales didn’t set the world alight either.

Non-store retail rose 1.6% on the month in December, were up 11.8% on the year and grew 2.3% in the three months to December compared with the third quarter. While all three measures were stronger than November, they were nowhere near the respective record highs. This, coming as the death of the U.K. high street looms larger, gives a downbeat picture of just how much consumers are cutting back on spending and bodes ill for the fourth quarter economic performance.

“These figures were again disappointing, and slightly weaker than predicted,” said David Kern, chief economist for the British Chambers of Commerce. “In the previous three months of 2012, the volume of retail sales fell by 0.6% compared with the previous quarter, and this reinforces the risk that the ONS will announce next week a small negative figure for the fourth quarter.”